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Bismarck Corporation has a single product whose selling price is $19. At an expected sales level of $1,840,000, the company's variable expenses are $560,000 and its fixed expenses are $300,000. The marketing manager has recommended paying a sales commission of 2% of sales to salespersons instead of paying them a fixed salary of $30,000. The company expects this change will increase unit sales by 5%.
Question: What would be company's net operating income if the marketing manager's recommendation is adopted?
A) 660,000 B) 659,600 C) 676,080 D) 706,080 E) 717,840
Merritt Equipment Company sells computers for $1,520 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2014, the company sold 920 computers on credit. Bas..
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